As per the latest third advance estimates for the Gujarat state, the production of castor seed in 2016/17 is revised down to 12.55 lakh tonnes.

Kolkata: Castor seed futures jumped higher on Wednesday as market participants have expected lower production in the current season while the demand is on the higher side. he May castor seed contract on NCDEX futures rose more than 1.50 percent today, the biggest one-day percentage gain for the contract since April 4 to settle at Rs. 4,675 per quintal.

As per the latest third advance estimates for the Gujarat state, the production of castor seed in 2016/17 is revised down to 12.55 lakh tonnes, which is lower by 1.65 lakh tonnes or 11% estimated in its second estimates in January 2017. In 2015/16, the production was estimated at 14.13 lakh tonnes.

"However, the open interest decreases today by 1790 tonnes which show short covering in the market. Therefore, if the price is rising and the open interest is declining then the short sellers happens to cover their positions which is causing the price rally," explained Ritesh Kumar Sahu (Fundamental Analyst – Agri Commodities), Angel Commodities Broking.

the castor futures have been declining after touching two year high in the first week of April. The decline in prices has been attributed to slow demand from the bulk buyers and crushers at higher prices despite forecasts of weaker output, slower arrivals in physical market and expectation of good export demand.